Interim results, yet again, show continued strong strategic execution with sales +21.2%, to £79m, and adj. EBITDA +18.7%, to £8.7m. This puts AVG well on track to deliver our unchanged FY expectations. The core Engineering business (1H25 sales +20.6%, EBITDA +29.5%) has achieved a 16% EBITDA CAGR in the last 5 years. This is testament to a well-executed and disciplined buy & build strategy focussed on the highly regulated markets of Energy and Infrastructure which carry enduring and positive growth trends. A strong Engineering order book (best cover position in over 5 years at >95% FY25e and c.60% FY26e) gives confidence in the journey ahead. There is also significant upside potential in the early stage Medical business. Adaptix is making encouraging progress whilst Magnetica is yet to be FDA approved. We reiterate our BUY rec and 525p TP (>50% upside) which, conservatively, only captures our view of value for the established Engineering business.
